In a welcome sign for sellers of privately-held businesses, the outlook for mergers and acquisitions ("M&A") in the Pacific Northwest Region is strong to begin the year. There are several reasons for rosy outlook.
- Interest, Inflation and Performance have Stabilized
Phil Brzytwa, an M & A intermediary at Exit Equity (https://exitequity.com), has an upbeat view of the M & A market for 2025. Phil noted that "interest and inflation have stabilized but, more importantly, business performance has stabilized since the pandemic. It is hard to sell a business with volatile earnings." Phil is correct. For several years, we were forced to try to normalize a business' financials in an effort to carve out the effects of the pandemic. As a result of stabilized performance of businesses, buyers and sellers will have an easier time arriving at a fair price.
In addition, concerns about rising interest rates and inflation have calmed. With a more predicable cost of funds and operations, investors seem more likely to take on additional risk.
- Political Uncertainty has Declined
Markets do not like uncertainty, and what is more uncertain than a presidential election? While no one knows the policy choices that will be made in 2025, the markets are relieved that the election is behind us, which removes some uncertainty. It will be interesting to watch how tariff and tax policy effects the market.
- Career Tech Workers want a Change
With a concentration of high earning tech workers in the Pacific Northwest, many are looking to buy their own business. When you combine buyers searching, aging business owners looking to sell, and stabilized economic forces, increased deal activity is sure to follow.
In our practice, we are already seeing a significant uptick in deal activity. As practitioners who deeply enjoy our work and providing value to our clients, we are excited about what 2025 brings to M & A. Whether you are a buyer or seller, give us a call today and our team will help you get your deal over the goal line.
Originally published on 15 January 2025
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